China restarting 200 million tons of aluminum production capacity

A report of the Barclays Capital on Tuesday points out that in the global boom of the recovery of the base metal capacity, the recovery of the base metal capacity in China takes up the majority.

The Barclays Capital predicted: now, China is restarting 200 million tons of aluminum annual production capacity, 50 million tons of zinc annual production capacity, and 4 million tons of Nickel-containing pig iron annual production capacity.

The report claimed that the China's base metal are more prone to be influenced by the price, because the producers are trend to buy the spot goods, and will not be restricted to the long-term contract.

The recovery of the base metal capacity in China is a typical example of the global recovery of the base metal capacity. The Barclays Capital predicted that the present price level can stand the recovery of 3.8 million tons of idle aluminum production capacity, 200,000 tons of refined zinc mineral production capacity, 500,000 tons of refined lead mineral production capacity, 190,000 tons of refined nickel mineral production capacity and 265,000 tons of refined copper mineral production capacity.

But the recovery of the production capacity is not only determined by the price. So only when the price of the base metals is higher than the cost will the producers restart the production capacity. 

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